AGRI AND FOOD PROCESSING NABARD Kerala www.nabard.org
/nabardonline Taking Rural India >> Forward
Slide 2
2 Food Processing Sector is the 5 th largest Manufacturing
Industry Contributes 9% to the manufacturing sector Contributes
1.5% to GDP Indian Food Processing Industry (2012) - Rs. 8 lakh
crore Estimate by 2015 : Rs. 12 lakh crore Important Segments
Indian Food Processing Industry & Potential Meat, Fish, Fruits,
Vegetables & Oils40% Dairy Products5% Grain Mill Products10%
Beverages20% Other Food Products25%
Slide 3
3 www.nabard.org /nabardonline Taking Rural India >>
Forward Advantage India FRUITS & VEGETABLES MILK & MILK
PRODUCTS MARINE PRODUCTS MEAT & POULTRY GRAIN PROCESSING
CONSUMER FOOD India is the worlds 2nd largest producer of fruits
and vegetables; production to rise from 227MT currently to 377MT by
2021 With 133 MT (P) in FY13, India is the largest producer of milk
in the world India is the largest producer of buffalo meat (1.5
MT*) and the second largest producer of goat meat (0.6 MT*) With
9.1 MT production in FY13, India is the second largest producer of
fish in the world India produced about 259 MT of food grains in
FY13 Among the fastest growing segments in India and includes (i)
Packaged Foods (ii) Aerated Soft Drinks (iii) Packaged Drinking
Water and (iv) Alcoholic Beverages
Slide 4
4 www.nabard.org /nabardonline Taking Rural India >>
Forward Indian Food Processing Industry Unorganised Sector42% Small
scale Industries33% Organised Sector25% Unorganised sector
(includes SSI) contributes 75% by volume and 50% by value. Inputs
Value Chain in Food Processing Production Procurement & Storage
Processing Retailing Seeds, Fertilizers, Farm Equipment Farmers,
Cooperatives, Companies Warehouses, Cold Storages Primary
(cleaning, grading, packing, etc.) Secondary (product conversion)
Malls Retail shops Cash & Carry
Slide 5
5 www.nabard.org /nabardonline Taking Rural India >>
Forward Spices Marine Products Cashews Coconuts Cocoa, Coffee and
Tea Fruits like banana and pineapple Major Food Processed in
Kerala
Slide 6
6 www.nabard.org /nabardonline Taking Rural India >>
Forward Coconut Park Rice park Activated carbon plant Modern Cold
Storage Coconut based food processing plant Modern rice mill
Individual Quick Freezing (IQF) facility Meat processing unit
Medicinal plants preservation and processing centre Coconut oil
mill and refinery Mango processing Marine food park Ready to Eat
(RTE) products Bioethanol from Cashew Apple Food processing
potential identified - Kerala
Slide 7
7 www.nabard.org /nabardonline Taking Rural India >>
Forward Refinance Rural Infrastructure Development Fund Umbrella
Programme on Natural Resource Management NABARD Infrastructure
Development Assistance Warehouse Infrastructure Fund Producer
Organisation Development Fund Off Farm Sector Development Food
Processing Fund NABARD Support to Processing Sector
Slide 8
FOOD PROCESSING FUND 2014-15 www.nabard.org /nabardonline
Taking Rural India >> Forward
Slide 9
9 Corpus contributed by Scheduled Commercial Banks NABARD to
finance directly or through consortium financing. Lending rate and
margin on loans to State Governments and Government entities on par
with RIDF lending Loans to private sector at rates not below PLR of
NABARD Operationalization of Fund
Slide 10
10 www.nabard.org /nabardonline Taking Rural India >>
Forward State Governments Entities promoted by State Governments
(with or without Government Guarantee) Entities promoted by
Government of India, Joint Ventures, SPVs, Cooperatives,
Federations of Cooperatives, Farmers Producer Organizations (FPOs),
corporates, companies, entrepreneurs, etc. Eligible Institutions /
Entities
Slide 11
11 www.nabard.org /nabardonline Taking Rural India >>
Forward Food Parks promoted by MoFPI Mega Food Parks promoted by
MoFPI Food Parks/food processing industrial estates promoted by
States Food processing/ agro processing/ multi products SEZs and
de-notified areas of these SEZs Any area having infrastructure and
designated as Food Park by MoFPI Designated Food Parks (DFPs)
Slide 12
12 www.nabard.org /nabardonline Taking Rural India >>
Forward Creation of infrastructure required in the DFPs
Augmentation of existing infrastructure in the DFPs New processing
units in DFPs Modernization of existing processing units in the
DFPs Eligible Projects
Slide 13
13 www.nabard.org /nabardonline Taking Rural India >>
Forward Activities resulting in value addition and/or enhanced
storage life Units requiring product processing (primary/secondary)
All types of products as per MoFPI guidelines (horticulture, milk,
meat, fish, cereals, oilseeds, confectionery, convenience foods,
ready-to-eat foods, nutraceuticals, health foods, etc.) Eligible
Processing Activities / Units
Slide 14
14 www.nabard.org /nabardonline Taking Rural India >>
Forward Land (up to a max. of 10% of land cost reckoned towards
project outlay) Site development All civil works, covering core and
non-core buildings, internal roads, fencing / boundary wall, etc.
Plant and machinery, equipment and other fixed assets Miscellaneous
fixed assets Technology transfer fee and other consultancy charges
Preliminary and pre-operative expenses Capitalized working capital
for one operating cycle, etc. Eligible Project Components
Slide 15
15 www.nabard.org /nabardonline Taking Rural India >>
Forward Lending Terms Sl. No Borrowing entityMax. loan (% of TFO)
Rate of interest (% p.a) Security (i) State Governments 95%As
applicable for RIDF (Bank Rate less 1.50%) State Government
Undertaking (ii) Entities promoted by State Govts. (with Govt.
Guarantee) 95% As applicable for RIDF (Bank Rate less 1.50%)
Primary security, Govt. guarantee and collateral security as
acceptable to NABARD
Slide 16
Entities promoted by Government of India, Joint ventures, SPVs,
Cooperatives, Federations of Cooperatives, FPOs, corporates,
companies, entrepreneurs, etc. ** Prime Lending Rate 16
www.nabard.org /nabardonline Taking Rural India >> Forward
Lending Terms Sl. No Borrowing entityMax. loan Tenure of loan RoI
(% p.a) Security (iii)Entities promoted by State Govts. (without
Govt. guarantee) 95%Up to 7 years PLR** + Risk Premium Primary
security and collateral security as acceptable to NABARD
(iv)Private Sector *75% Up to 7 years PLR** + Risk Premium Primary
security and collateral security as acceptable to NABARD
Slide 17
17 www.nabard.org /nabardonline Taking Rural India >>
Forward Linked to PLR of NABARD and Risk Rating of Borrower PLR of
NABARD to be worked out by ALCO quarterly Risk Rating of the
Borrower Risk premium to be based on Risk Rating Lending Rate to
Private Sector
Slide 18
18 www.nabard.org /nabardonline Taking Rural India >>
Forward Repayment Borrowing entityTotal repayment period Grace
periodNature of installments Remarks State Governments 7 years2
(fixed)AnnualEach installment of release is a separate loan and has
separate repayment schedule State Agencies (with Govt. Guarantee) 7
years2 (fixed)Quarterly / Half- yearly / Annual (as per cash flows)
PLR-basedUp to 7 years Up to 2 years (based on cash flows)
Quarterly / Half- yearly / Annual (as per cash flows) @ In all
cases, interest shall be paid at quarterly intervals, including the
moratorium period.
Slide 19
19 www.nabard.org /nabardonline Taking Rural India >>
Forward Evaluation Fee No fees for RIDF-based lending Fees @ 0.25%
of Project Cost, subject to a min. of Rs. 2 lakh and a max. of Rs.
30 lakh for PLR-based lending Annual Monitoring Fee No fees for
RIDF-based lending Expenses on undertaking technical, financial and
legal inspections undertaken during the currency of the loan,
either by NABARD or through a LIE / LLC appointed for the specific
purpose, shall be reimbursed by the borrowing entity to NABARD.
Other Aspects
Slide 20
THANK YOU Picture 3 www.nabard.org /nabardonline Taking Rural
India >> Forward
Slide 21
UPNRM 3 www.nabard.org /nabardonline Taking Rural India
>> Forward
Slide 22
22 www.nabard.org /nabardonline Taking Rural India >>
Forward A) Core Activities Soil and water conservation Plantation
and horticulture (tree based farming, Bamboo based farming, wadi
development,organic farming, energy plantations) Forestry
activities (rehabilitation and management /Community Forest
management, biodiversity conservation) Farming systems management
(including livestock and aquaculture resources) Climate change
adaptation / CDM Other Aspects
Slide 23
23 www.nabard.org /nabardonline Taking Rural India >>
Forward b) Supplementary / support areas forward and backward
linkages and livelihood generating activities; processing, storage,
marketing, supply chain critical rural infrastructure (including
rural roads, minor irrigation, drinking water) renewable energy
(micro/mini-hydel, biomass based power generation, biofuels,
wind-power, solar power) livelihood generating activities (dairy,
poultry, fisheries, etc) c) Information & Knowledge Management
(IKM) and Capacity Building Sectors Covered
Slide 24
24 www.nabard.org /nabardonline Taking Rural India >>
Forward Pro-poor (improves employment, reduces poverty, improves
access to credit, information, entitlements) Ensuring
sustainability (conserves / augments NRM base of the region,
prevents degradation) Good Governance (Equity in ownership and
access and use of resources, decentralized decision making,
accountability and transparency) Community participation (ownership
/ management/ empowerment) Integrated approach (need-based and
flexible, convergence with other schemes / programmes) UPNRM
Guiding Principles
Slide 25
25 www.nabard.org /nabardonline Taking Rural India >>
Forward Rate of interest on UPNRM loans Type of funding Channel
Partner Type of ProjectsRate of interest Project finance/ bulk
finance NGOs, Cooperatives, MFIs Corporates Projects implemented
thru CBOs (where loan is passed on to rural people directly or
through POs); 9% 10 -12 % Projects implemented directly (without
on- lending to people) 9-10% State Govt8.5%
Slide 26
26 www.nabard.org /nabardonline Taking Rural India >>
Forward Investment loan various NRM measures, associated livelihood
activities, related infrastructure and marketing chain management,
etc Working Capital / Revolving Assistance Value addition and
supply chain management Production of raw material, Procurement and
stocking of produce, Processing and packing, Marketing inventories,
distribution, etc Grant support Proposal development Capacity
building Community mobilisation Cost of expertise UPNRM Special
Features contd
Slide 27
FINANCING COLD CHAIN INFRASTRUCTURE UNDER WAREHOUSE
INFRASTRUCTURE FUND 3 www.nabard.org /nabardonline Taking Rural
India >> Forward
Slide 28
Eligible Projects 28 www.nabard.org /nabardonline Taking Rural
India >> Forward Cold chain for Horticulture Products Pack
houses / Integrated Pack houses (washing, grading, waxing, packing,
etc.) Pre-cooling Units (with / without staging cold rooms)
Standalone cold storages / CA Storages / MA Storages Refrigerated
vehicles (reefer vans/ reefer trucks) Freezing / Individual Quick
Freezing Units Integrated Cold Chain Projects
Slide 29
Eligible Items of Project Cost (indicative) 29 www.nabard.org
/nabardonline Taking Rural India >> Forward Land (up to a
max. of 10%) Civil works (core and ancillary) Plant and Machinery
Equipment and Miscellaneous Fixed Assets Technical consultancy
charges Preliminary and pre-operative charges Interest during
construction Cost contingencies Capitalized working capital for one
operating cycle
Slide 30
Sectors prioritized by GoI. Loans to Public and Private Sector.
Private Sector* includes all agencies without Govt. guarantee.
Loans to State Govts. & Govt undertakings with State Government
guarantee on RIDF terms. Loans to Private Sector PLR based interest
rate. Sectors eligible 30 www.nabard.org /nabardonline Taking Rural
India >> Forward [email protected][email protected]
/[email protected] * - Central Government /State Government
undertakings (without guarantee), Joint ventures, SPVs, Federations
of Cooperatives, FPOs, Corporates, Companies, Entrepreneurs
etc.,
Slide 31
WIF 2014 -15- Financing terms and conditions 31 www.nabard.org
/nabardonline Taking Rural India >> Forward 13 Oct 2014
[email protected] Type of Borrower Maximum Quantum of Loan (% of TFO)
Tenor of loan (Years) Rate of Interest (% p.a.) Security/
Documentation A Loans with RIDF rate of interest 1 State
Governments (loans to Finance dept. under article 293(3) ) 9507
Prevailing RIDF rate of interest Government undertaking. 2State
Owned Corporations (loans outside article 293(3) 9507Prevailing
RIDF rate of interest Government Guarantee + Primary &
Collateral Security, etc.
Slide 32
WIF 2014 -15- Financing terms and conditions 32 www.nabard.org
/nabardonline Taking Rural India >> Forward [email protected]
Type of Borrower Max. Quan. of Loan (% of TFO) Tenor of loan
(Years) Rate of Interest (% p.a.) Security/ Documentation BLoans
with interest rates based on Prime Lending Rate ( PLR) 1
State/Central Govt. Owned/Assisted Entities (without Government
guarantee)/ Cooperatives, FPOs, SPVs set up under PPP mode, etc.,
9507PLR*+ RP* Primary & Collateral Security, Assignment of
rentals receivable and any other unencumbered receivables, Debt
Service Reserve etc. 7 years PLR+ RP+TP* 2 Private Companies/
Corporates/ Individual Entrepreneurs etc. 7507PLR*+ RP* Primary
& Collateral Security, Assignment of rentals receivable and any
other unencumbered receivables, Debt Service Reserve etc. > 7
yearsPLR+ RP+TP* ABOVE SEVEN YEARS APPLICABLE ONLY FOR WIF LOANS *-
PLR Prime Lending Rate, RP Risk Premium, TP Tenor Premium.
Slide 33
Producers Organisation 3 www.nabard.org /nabardonline Taking
Rural India >> Forward
Slide 34
Presentation6.pptx 34 DEFINITION OF PRODUCER ORGANIZATIONS
Formed and owned by a group of producers for either farm or
non-farm activities It is a registered body and a legal entity
Producers are shareholders in the organization It deals with
business activities related to the primary produce/product. It
works for the benefit of the member producers Portions of profit
are shared amongst the producers and the balance goes to the share
capital or reserves Taking Rural India >> Forward
Slide 35
What POs can offer End to end solutions !! Supply of seeds,
fertilizers, pesticides, agri implements, etc Input Supply Services
Provides/facilitates for loan for crops, purchase of agri
implements, etc Financial Services Promote best farming practices,
marketing information System, skill upgradation, etc. Technical
Services
Slide 36
Taking Rural India >> Forward What POs can offer End to
end solutions !! Various insurance like Crop Insurance, Life
insurance, etc Insurance Services Procurement, storage, marketing,
value addition and packaging Procurement & Packaging Services
Direct marketing to reduce income leakages Marketing Services
Making channels for information (product specification, market
prices, etc Networking Services
Slide 37
Presentation6.pptx 37 NABARD COMPREHENSIVE SUPPORT PROGRAMME
A.Credit support I.In the form of loan to POs i.Term loan
ii.Working Capital Term Loan iii.Composite Loan (term loan +
working capital) II. Assistance to Implementing Agency for on
lending to PO Credit Support to implementing agencies like NGOs,
Vas, Trusts (instrumental in forming SHGs, Farmer federations,
clusters, other cooperatives/POs) and financial institutions
including, subsidiaries like ABFL, ADFT and NABFINS participating
in value chain process, for on-lending to POs, farmers/artisans
groups or clusters such as SHGs, JLG, federations and farmers
clubs. B. Credit plus support in the form of grant, subject to a
cap of maximum 20% of loan amount I.Capacity Building: Includes
Human resource development and organizational development. II.
Market Linkages III.Others (DPR preparation, administrative
expenses etc) Taking Rural India >> Forward
Slide 38
Presentation6.pptx 38 NABARD COMPREHENSIVE SUPPORT PROGRAMME
III. Lending to Producer Organisations for Contribution to Share
Capital Model I: Lending to Producer Organisations for Contribution
to Share Capital Model II: Lending to the promoting agency which in
turn can lend to the members of the PO Features: Capital: loan
would be at 1:1 basis. Cap on loan amount would be Rs. 25 lakh.
Further cap of Rs. 25000/- per member Repayment 5-7 years with 1-2
years moratorium period. ` Taking Rural India >> Forward
Slide 39
Presentation6.pptx 39 DETAILS OF FINANCIAL ASSISTANCE Quantum
Limited to 90% of total financial outlay Mode Loan for taking up of
economic activity along with grant or loan or a blend of both for
capacity building RoI -As decided by ALCO Present range: 10.25-12%
based on collaterals provided 10.25 % in case of 100% collateral
Taking Rural India >> Forward
Slide 40
Presentation6.pptx 40 ELIGIBLE INSTITUTIONS PARTNERSHIP WITH
CORPORATES, LINE DEPARTMENTS, NGOS, CBO Support to Supply Chain
from Primary producer to retailer/ultimate consumer Support to
value addition Encourage feeder/suppliers to retailer chains like
Big Bazar to form/promote POs avail assistance under PODF.
Subsidiaries/Ancilliaries of larger entities/corporate business
houses can promote POs and avail assistance under PODF Taking Rural
India >> Forward